* FX continue to weaken, zloty leads losses after IMF rally
* Zloty still seen better positioned than peers
By Marius Zaharia
BUCHAREST, April 21 (Reuters) - The Polish zloty led losses
in emerging European currencies on Tuesday, hit by falling share
prices that signalled a halt to a recent risk rally.
The zloty has erased the 4 percent gains it made last week
on news of an IMF credit line, although better than expected
industrial output data on Monday has prompted some strategists
to say the unit could rebound and outperform peers.
Polish industrial output fell by a much less than expected 2
percent annually in March, compared with drops of around a fifth
for some peers [], indicating Poland's better
position in a region facing recession this year.
"The near-term global backdrop clearly remains challenging
for emerging Europe," UniCredit analysts said in a note, but
added: "(We) remain short euro/zloty following the firm Polish
(industrial output) release and are considering using current
market weakness to take profit on euro/Czech longs."
By 0717 GMT, the zloty <EURPLN=> had fallen 1.3 percent,
while the Hungarian forint <EURHUF=> had lost 0.7 percent, a day
after the central bank kept interest rates flat at 9.5 percent
for a third straight month due to the currency's volatility.
[]
Central and eastern European central banks are seen holding
fire in the near-term, to protect their currencies, pummelled by
the global financial crisis which has caught these economies
highly exposed to risk.
"The latest data, higher wages too, clearly show there will
be no (Polish) rate cut this month, equity-neutral in our view,
while also providing some protection for the zloty," Chevreux
analysts said in a note.
Elsewhere in the region, the Romanian leu <EURRON=> edged
down 0.1 percent, as markets reopened after the orthodox Easter
holidays, while the Czech crown <EURCZK=> fell 0.7 percent to
its lowest levels this month.
"There has been a combination of bad news (globally) and
people are starting to sell risk again," a Prague dealer said.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.196 27.003 -0.71% -1.63%
Polish zloty <EURPLN=> 4.451 4.393 -1.3% -7.55%
Hungarian forint <EURHUF=> 301.5 299.33 -0.72% -12.59%
Croatian kuna <EURHRK=> 7.41 7.383 -0.36% -0.61%
Romanian leu <EURRON=> 4.248 4.245 -0.07% -5.5%
Serbian dinar <EURRSD=> 92.939 92.73 -0.22% -3.72%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +31 basis points to 222bps over bmk*
4-yr T-bond CZ4YT=RR +8 basis points to +214bps over bmk*
8-yr T-bond CZ8YT=RR +4 basis points to +301bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +13 basis points to +377bps over bmk*
5-yr T-bond PL5YT=RR +4 basis points to +306bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +265bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +28 basis points to +965bps over bmk*
5-yr T-bond HU5YT=RR +21 basis points to +904bps over bmk*
10-yr T-bond HU10YT=RR +22 basis points to +703bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1017 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
Spot FX rates
Eastern Europe spot FX <EEFX=> Middle East spot FX <MEFX=>
Asia spot FX <ASIAFX=> Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus; Writing by Marius Zaharia;
Editing by Ruth Pitchford)
